Reports that Reds manager Raphael Benitez is considering Upson as a long-term replacement for Sami Hyypia have coincided with another round of contract negotiations.

And there has also been a story suggesting that Arsenal have a 'buy back' option on the player they sold in a £2.5million deal two years ago.

Upson's agent, Barry Neville, fuelled speculation by saying: "Matthew didn't fall out with anyone at Arsenal and he always got on very well with coaching staff. In principle, he would not have a problem going back - you can never say never."

Bruce insisted: "There's no 'buy back' clause and everyone should be rest assured that we want to tie Matt up to a new contract.

"We promised we would renegotiate after he reached 60 games for us, and that's what we've been doing. Talks are going quite nicely.

"He's done fantastically well for us over the last couple of years and we think he can improve further.

"In a situation like this you often find speculation flying all over the place. It goes on a lot now because there are sheets and sheets to fill in newspapers.

"On a Sunday, each paper has a different story about players supposedly coming or going.

"Certainly, nobody from Liverpool has contacted me or any representative of the board with regard to Matt."

The Blues boss said that he had a clean bill of health for Sunday's St Andrew's derby against Villa, bar long-term absentees David Dunn and Muzzy Izzet, plus Olivier Tebily (calf).

Stan Lazaridis has been training fully after taking a bang to his knee at Albion and Salif Diao is all the better for two successive reserve team appearances.

"Walter Pandiani had an injection in his ankle to get through the last game but he's trained for the past three days and is a lot more comfortable within himself," said Bruce.